Where to buy a car

Buying a car through a private sale

Private sales make up a large portion of used car sales in Australia. While popular, they are largely unregulated and there is limited protection if the car is found to be stolen or has problems.

Things to consider

• You will not have a cooling-off period.
• Clear title is not guaranteed.
• You have no protection if the vehicle turns out to be stolen.
• You won’t get a warranty.

Things to do

• Ensure the vehicle has a valid safety certificate.
• Make sure you conduct a search with the Personal Property Securities Register.
• Check that the vehicle details on the PPSR match the vehicle.

Be aware that if a vehicle’s identifiers have been changed to conceal theft, these checks will not protect your purchase. There is no way to be 100 percent sure.

Visit the Queensland government's Fair Trading > Private car sales page for more precautionary tips.

Online sales

Online car sales websites are becoming an increasingly popular way to buy and sell used cars. They act as a marketplace, bringing together buyers with private and commercial sellers from anywhere in Australia or the world.

When considering online purchasing you should take the same precautions as you would if you were buying from a private seller. Especially if you are looking overseas where Australian Consumer Law will not apply.

Visit the Queensland government's Fair Trading > Buying cars safely online page for more precautionary tips.

Car dealerships

Dealer sales may be a bit more expensive but they are a good choice if you want the protection afforded by Queensland law.

You can check online to see if your dealer is licensed.

A dealer will offer you protections such as a:

• Cooling-off period – 1 business day to cancel the contract without suffering a large penalty. Guaranteed.
• Statutory warranty – protection against financial loss if your vehicle is faulty. A statutory warranty costs you nothing.
• Clear title – a guarantee the vehicle is free from unpaid debt.

Deposits, contracts and paperwork

To purchase a vehicle from a dealer you will need to sign a legally binding contract of sale. Like any contract, you should read it carefully and understand it before you sign. When you do sign you will be required to pay a deposit.

Make sure you have read and received the following:

• A notice giving full details of the vehicle
• Specifics of the cooling-off period (i.e. the date and time it starts and ends)
• The amount of your deposit that is non-refundable (maximum $100)
• Details on how to cancel the contract during the cooling-off period
• Confirmation the dealer will return any trade-in that was part of the deal if you decide not to buy the car
• A notice clearly stating the statutory warranty period (if applicable)
• A guarantee of title
• A current safety certificate
• A copy of an acknowledgement signed by you, confirming you are aware the car has been water damaged (if applicable).

If the dealer has agreed to carry out repairs before the sale they should be listed in the contract. Repairs should be checked before taking delivery of the car. You should reconsider buying the car if the dealer will not include these additional clauses in the contract.

Problems with your purchase

• If your vehicle has a problem and needs to be repaired follow the instructions on your statutory warranty.
• Always contact your dealer first if you are unsatisfied with your purchase .
• If you cannot reach a resolution you should make a formal complaint through the Office of Fair Trading, the Motor Trades Association of Queensland.

When trying to resolve an issue always back up any communication by confirming in writing what has been agreed. Keep notes and records of all correspondence. This will be vital if the issue eventually needs a legal solution.

Brokers and wholesalers

Brokers and wholesalers offer another alternative to motor dealers

Brokers

Brokers locate new and used cars of the particular make and model specified by the buyer, usually through a network of licensed motor dealers.

Brokers charge a commission which can be up front or built into the price of the car.

The advantage here is that the broker does the 'legwork' and finds the appropriate vehicles. Great if you’re short on time.

Brokers, like motor dealers, are required to be licensed and operate under the Property Agents and Motor Dealers Act . Where a broker sources a used vehicle from a dealer, it is the dealer who guarantees clear title and provides the statutory warranty.

Wholesalers

Buying from a wholesaler does not guarantee you will pay wholesale price for your car. You could pay the same price as you would at a used car dealership.

When buying from a wholesaler you have the same rights and obligations, so you should take the same precautions as if you were buying through a normal used car dealership.

Auctions

Buying a used car at auction can be cheaper than from a dealer, but it also carries greater risks. These include:

• the possibility of no statutory warranty cover or Safety Certificate
• no cooling-off period
• no opportunity for a test drive
• inspection is limited to what you can see
• no assistance if major faults are found

Some auction houses provide a condition report however these are generally not the result of a full mechanical inspection so it may not list all defects.

An auctioneer is bound by many of the same requirements as a motor dealer and has to guarantee clear title.

Tips for buying at auction

• If you don’t know about cars, take someone with you who does.
• Listen to the auctioneer as they will give important information about the car and the conditions of the sale.
• Research the car you want to buy and determine a fair price for it.
• Set a value and don’t go over it – it’s easy to get caught up in the excitement of bidding.
• The price should be significantly less than what the retail price would be. This reflects the increased risk involved.
• Check if there is a buyer premium to be added to the successful bid.

Damaged vehicle auctions

Vehicles that have been damaged and written-off by insurance companies are usually sold at auction. They fall into two categories:

• Statutory write-offs are too severely damaged to be repaired and cannot be re-registered. Generally sold for spare parts or scrap.
• Repairable write-offs can only be re-registered once they have passed a Written-Off Vehicle Inspection (WOVI).

For people with the knowledge and skill, buying and repairing a wrecked vehicle can be seen as a cheaper option. However repair costs often exceed the vehicle’s value so shortcuts and poor repairs are common.

These cars inevitably end up on the used car market. This is why an independent vehicle inspection and a PPSR check is a must for all used car purchases.